Community Development Financial Institutions (CDFIs) loan funds are traditionally non-profit organizations with a goal of uplifting underserved diverse entrepreneurs and small businesses with access to capital, technical assistance, and business development resources. Small businesses often struggle to access valuable financial services. According to the Bipartisan Policy Center, 78% of minority and women-owned businesses experience financing shortfalls and have unmet funding needs through traditional lenders. That is where CDFIs become a vital resource for entrepreneurs and small business owners.
CDFIs receive funding through the U.S. Department of the Treasury’s CDFI Fund or other sources to distribute to small businesses. There are currently more than 1,400 CDFIs loan fund entities in the U.S., and each one plays a significant role in boosting local economies. For thousands of entrepreneurs and small businesses, access to financing and capital often does not go through traditional banks, it often runs through a CDFI Community Development Loan Funds. These CDFI Loan Funds often play a leading role in financing businesses and helping to deploy capital into rural and urban communities where market access to capital is often lacking.
Moreover, these Loan Funds are classified into four categories: microenterprise, small business, housing, and community service organizations. What makes CDFIs so vital to rural and urban communities is not the lending itself, it is the additional service they offer. CDFI Community Loan Funds typically pair access to financing with technical assistance, coaching, and networking opportunities that help borrowers turn capital into lasting growth. Through access to capital, financial assistance, and educational support, CDFIs, such as HBDI, help new and establish small businesses not only create jobs but drive economic development, make homeownership accessible, and revitalize communities.
From microloans to SBA 504 financing, HBDI lending programs are designed with flexibility in mind, making it easier for eligible businesses to grow, compete, and achieve long-term success.